Bangladesh’s ongoing energy crisis has evolved from a temporary supply disruption into a broader energy security challenge, exposing deep structural vulnerabilities in the country’s energy sector. This policy brief examines the underlying causes of the crisis, focusing on the depletion of domestic natural gas reserves, growing dependence on imported fossil fuels, infrastructure bottlenecks, and limited progress in energy diversification. The analysis highlights that Bangladesh’s energy and electricity generation mix remains overwhelmingly dependent on fossil fuels, with natural gas, coal, and furnace oil accounting for more than four-fifths of installed generation capacity. As domestic gas production continues to decline, the country has increasingly relied on imported LNG and other energy products, exposing the economy to global price volatility, geopolitical disruptions, and growing fiscal burdens.

The policy brief further explores the economic implications of the recent energy crunch, including its effects on industrial productivity, export competitiveness, inflation, household welfare, and investment confidence. It assesses the government’s immediate response measures and argues that short-term crisis management alone cannot ensure long-term energy security. The policy brief proposes a comprehensive set of short-, medium-, and long-term policy measures, including optimised LNG procurement, energy efficiency improvements, transmission and distribution upgrades, diversification of energy sources, expansion of renewable energy, and accelerated domestic gas exploration. It concludes that building a resilient energy system requires balancing energy affordability, reliability, efficiency, and sustainability to support Bangladesh’s long-term economic development and resilience against future shocks.

Authors: Fahmida Khatun, Foqoruddin Al Kabir and Sumiya Rahman
Publication Period: October 2026